Betty's Fashions operates retail stores in both downtown and suburban locations. The company has two responsibility centers: the City Division, which contains stores in downtown locations, and the Mall Division, which contains stores in suburban locations. Betty's CEO Is concerned about the profitability of the City Division, which has been operating at a loss for the last several years. The most recent City Division Income statement follows. The CEO has asked for your advice on shutting down the City Division's operations. If the City Division is eliminated, corporate administration is not expected to change, nor are any other changes expected in the operations or costs of the Mall Division. BETTY'S FASHIONS, CITY DIVISION Divisional Income Statement For the Year Ending January 31 Sales revenue Costs Advertising-City Division Cost of goods sold Divisional administrative salaries Selling costs (sales commissions) Rent Share of corporate administration Total costs Net loss before income tax benefit Tax benefit at 40% rate Net loss $ 6,100,000 193,000 3,950,000 308,000 598,000 753,000 493,000 $ 6,295,000 $ (195,000) 78,000 (117,000) Required: a. Using the worksheet below, determine which revenues and costs are probably differential for the decision to discontinue City Division's operations. b. What will be the effect on Betty's profits if the division is eliminated? Complete this question by entering your answers in the tabs below. Required A Required B Using the worksheet below, determine which revenues and costs are probably differential for the decision to discontinue City Division's operations. Betty's Fashions, City Division Divisional Income Statement Differential Revenues and Costs For the Year Ending January 31 Sales revenue Costs Advertising - City division Cost of goods sold Divisional administrative salaries Selling costs (sales commissions) Rent Share of corporate administration Total costs Required A Required B > Required A Required B What will be the effect on Betty's profits if the division is eliminated? Betty's profits will by < Required A Required B>